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Chugach, AIX sign supply agreement
Chugach Electric Association could soon start buying natural gas from AIX Energy LLC under the terms of a supply agreement the two parties closed toward the end of last year.
The deal is the first since the Houston-based AIX Energy acquired the Kenai Loop field from previous operator Buccaneer Energy Ltd., which filed for bankruptcy in late May 2014.
“The contract provides flexibility in both the purchase price and volumes, with specific prices and volumes to be determined by each transaction,” Chugach Senior Vice President for Strategic Development and Regulatory Affairs Lee D. Thibert told the Regulatory Commission of Alaska on Jan. 15. That said, the contract caps prices at $6.24 per thousand cubic feet and caps volumes at 300 million cubic feet, meaning that Chugach would spend no more than $1.9 million during the nearly yearlong contract.
Interruptible contract The interruptible contract allows Chugach or AIX Energy to choose to buy or sell volumes as needed, although Chugach said it expected to need the available volumes.
Although the companies signed the deal on Dec. 22, 2014, it only came to light after Chugach asked regulators for permission to recover the gas purchases through its rates.
While utilities typically seek regulatory approval for gas supply agreements, Chugach is maintaining that regulatory approval isn’t required for deals lasting less than a year.
Given the leap year in 2016, the deal between Chugach and AIX Energy holds the distinction of running for 365 days and also for one day shy of a full calendar year.
The state is taking comments on the request through Feb. 20.
Although AIX Energy acquired the Alaska assets of Buccaneer through a bankruptcy auction last year, Buccaneer is still the official leaseholder, according to state records.
- Eric Lidji
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